Where Africa and Technology Collide!

Tag: startup

I end up talking a lot about our tech community here in Kenya and I’ve had a front seat to what it looks like from the iHub. In my mind, I think about it like the cable conduit below, where you have multiple different parts that seem to look, feel and act independently, but together form a whole.

One grouping is starups, another is investors, another is large tech companies, and yet another is researchers. There are bloggers, digital creatives, visiting techies, SME leaders who’ve learned their lessons, and freelancers moonlighting from their day jobs. It’s a big mixed bag and we all together form an ecosystem. A healthy ecosystem is where all of the sub-cable systems are functioning well and there are no cuts.

Moving beyond the cable metaphor, a healthy tech ecosystem is where the different parties are able to and want to work together. Where each is happy to see the other do well and will go out of their way to help make connections and bring others forwards with themselves.

This year at Pivot East I had my first look at Sendy, which does for motorcycle courier deliveries and customers in Nairobi, what Uber did for taxis and passengers in San Francisco. At its heart, Sendy is about bringing the vast and growing motorcycle courier and delivery network in Africa into the digital and networked world.

Motorcycles in downtown Monrovia, Liberia

This is a big deal, because those of us who live in large African cities know just how inefficient driving a car around the traffic-plagued metropolises can be. With the bad roads, traffic and high cost of fuel, motorcycle deliveries are a natural path.

Indeed, in almost every city, from primary to tertiary throughout the continent, you’ll find thousands of motorcycle guys sitting by the side of the road, ready to courier a package or serve as a taxi. They ride inexpensive $800-$1200 Chinese and Indian motorcycle brands, are generally not trained very well, have little safety equipment and are some of the most reckless riders I know.

When Alloys Meshack, Sendy’s CEO, stepped onto stage for his 7-minute pitch, I was hooked. It sounded like the right team, a good business plan, and one that could scale well beyond Nairobi. I met with him again this month, and got into a lot more details around the business, and this encouraged my thoughts on both him and his team, as well as the broader scope of the business that they are building. It is truly impressive.

How it Works

Sendy delivery – Android app screenshot

I also signed up for the service, and then used it.

It’s as simple as this:

Download the Android app, or sign-in to the web app at Sendy.co.ke

Click the button that you have a delivery (or pickup) to be made.

You can see the map for where the rider is – my wait was approx 5 minutes for the courier to arrive

Give him the package and directions

There is a GPS transponder on the motorcycle, and you get an SMS update when the delivery rider gets withing 50m of the delivery zone. Once the package is delivered, there is another confirmation that the rider sends to Sendy, that comes to you as well. Payment is then made automatically by either credit card or Mpesa.

My delivery took about 25 minutes, from first Android app entry, to delivery about 5km away. At the end, you can rate your delivery rider, so that the best are known and get more business. I found my particular rider courteous and patient. He also told me that he makes about 5-6 deliveries a day with Sendy, and loves the service.

Challenges and Opportunities

The Sendy opportunity in eCommerce

With Africa’s growing need for logistics around eCommerce, Sendy presents a natural option for everyone from Jumia to your local supermarket. Motorcycles are already an accepted means of delivery for non-traditional business and large enterprises alike. The idea of capturing a large portion of this, without all the baggage of a normal courier company setup, is good for both Sendy and the everyday bodaboda/courier guy.

There are a couple hurdles to overcome to make this a simple process to onboard new customers, receive payment and then send payment to the courier riders. Unlike the US or EU, not everyone has a credit card, and the mobile payment options don’t allow for “pull” billing (instead, the customer has to “push” a payment to your service), which is clunky.

Sendy has corporate accounts (which is now used by both BRCK and Ushahidi), and for businesses, finding a good payment process isn’t a problem. However, there will need to be some creative thinking for individuals and small businesses in order to make Sendy as painless as it promises to be.

The service verifies the courier riders, keeping their records on file, and providing the necessary technology for both tracking of motorcycle and communications with the rider. This means that qualified riders are picked, lessening the chance of getting robbed, and the ability to rate a courier creates a system that builds trust over time.

The opportunities that Sendy represents are staggering. I encouraged Meshack to get Nairobi right quickly, then scale up and move beyond into other major cities in the region.

Sendy is raising a seed round of investment. If this opportunity is interesting to you, you should reach out to them.

The Savannah Fund has been in operation about 8 months now, and has done 5 investments. One at $200k+, one at $75k and three at the accelerator level of $25k each.

We’re accepting applications through the end of this week, and we’re looking for 5 quality startups to begin the accelerator program in August. Fill out this form to apply.

What is the Savannah Accelerator Fund?

Last month we put together a short video to better explain the Savannah Fund, and why it’s important for tech entrepreneurs in the region.

In short, it’s not just the $25k, which is useful but not the reason why you should be applying, it’s all of the other connections, training and access to people that bring the real value.

Mbwana has written a post on some of the lessons learned along the way, well worth reading:

“Some of the sessions included Max Ventilla who sold his startup Aardvark to Google, Carey Eaton of Africa One Media (best known for Cheki), Eran Feinstein of 3G Direct Pay a leading credit card and payment processor in East Africa, and investors including Khosla Impact. We also focused heavily on digital marketing by bringing technical experts such as Agnes Sokol who continues to advise some of the startups. In the next accelerator we will add additional resources including collaborating with iHub Research and UX Design Lab.”

In the last couple weeks I’ve had the opportunity to be in Nigeria (Maker Faire Africa), followed by South Africa (AfricaCom). Along with Kenya, these countries represent the biggest technology countries on the continent. They are the regional tech hub cities at this point in Africa.

In both places I was struck by how different each country is, and the challenges and opportunities that arise due to the tech community’s connectedness, regulatory stance and local entrepreneurship culture.

Some Theories

South Africa has so much infrastructure, you’re immediately struck by how money isn’t an issue there. The lesson I took away from the DEMO Africa conference is that South Africans are far, far ahead of the rest of the continent in enterprise apps and services. They tend to see themselves as “not African”, and try to identify with Americans or Europeans. This comes out in their tech products, they have a more global focus and tend to fill the gaps that are needed by the many multinational corporates that call South Africa their home in Africa.

Nigeria has so many people, it overwhelms in it’s pure mass. It’s a bit cramped, louder, and more energetic than almost any other country in Africa. Nigerians have a long history in entertainment, with their Nollywood films and music spreading across the continent. It wouldn’t be surprising to find a killer entertainment consumer app coming from Nigeria, that can be exported regionally and internationally.

Kenyan tech companies tend to focus on localized consumer needs, and we have a competitive advantage in anything to do with mobile money. Even in the secondary and tertiary uses, I’m always struck by how much more advanced the Kenyan startups are with local eCommerce products and marketplaces than their other African counterparts.

Kenya is smaller than Nigeria and has less infrastructure than South Africa. Why then are there so many more startups per capita, more innovative products coming from Kenya right now?

A History of Community

Kenya’s technology scene is vibrant and there’s a certain connectedness amongst the community that isn’t found in the other two countries, yet.

I was in Ghana in 2009 for the first Maker Faire Africa. I went around visiting a lot of tech companies and individuals I had gotten to know via blogging over the years. What struck me at the time was that there wasn’t even a tech mailing list that connected the community. We’d had the Skunkworks mailing list in Kenya since 2006. My assumption had been that every country with any type of critical mass in tech had a forum of some sort for connecting tech people to each other.

20+ members in the Ghana tech community came together at Maker Faire Africa and decided to start Ghana tech mailing list. I’m still subscribed to it, and it’s a great resource for both myself and those using it. With that list, and the founding of MEST in 2008 (their tech entrepreneur training center) that Ghana’s tech scene started to get connected and move forward strongly together a couple years ago.

Fast forward to Nigeria a couple weeks ago. As far as I can tell, there are some tech-related forums, though not a mailing list. These have been valuable in connecting people, but it seems that the ccHub, founded last year, is the start of a real connectedness between members of the tech community. I got the feeling that all the energy and entrepreneurialism that makes up the Nigerian culture of business now has a tech heart and that we’ll see an acceleration of growth in the coming years that has been missing until now.

For many years, the tech bloggers of South Africa organized and centralized conversations around tech with events like 27Dinner, BarCamps and more. They have long-standing tech hubs, such as Bandwidth Barn, they have a network of angel investors and greater access to VC funding. There wasn’t a centralized mailing list or forum back in the day (before 2008) that I know of. A few years ago we saw the rise of Silicon Cape, an initiative to bring attention to Cape Town’s startup culture.

At AfricaCom an interesting discussion ensued around South Africa’s tech community and questions on why it wasn’t getting as much attention or traction as Kenya. Two points were brought up that I think are incredibly important.

First, while Silicon Cape is focused on branding (and doing a good job of it), what is really needed is someone to bring the new tech hubs, startups, angel investors, media, academia, corporations, and even the government together. There’s a lot of activity, each in it’s own silo. It’s a hard job being the trusted bridge between these different parts of what can be a very opinionated and political community. I’d suggest that Silicon Cape’s mission should be to do just this.

Second, In Kenya and Nigeria the founders of startups tend to look a lot like a cross section of the country’s population. The tech community in South Africa doesn’t look a lot like the racial makeup of the country. to put it bluntly, I rarely see a black South African tech entrepreneur. Not being from there, I’m not sure why this is, so it’s just an observation. It’s hard to build a product for a community that you’re not from, nor understand, so I can’t help but think that the South African tech scene would benefit greatly by having more people building companies to solve problems from all parts of that country’s stratified makeup.

A Connected Community

Sitting at 38,000 feet writing this piece, I keep thinking how there seems to be a link between the connectedness of a tech community in a country and it’s vibrancy as an industry. Though I realize there are other variables, this explanation helps me explain why Kenya is further ahead in some areas than other countries.

As I look to Kenya more deeply I’m struck by how important the egoless actions of individuals like Riyaz Bachani and Josiah Mugambi (Skunkworks), Dr. Bitange Ndemo (Government), Joe Mucheru (Google), and others have been in setting us on a trajectory that we all benefit from as the whole becomes greater than the sum of it’s parts.

This theory of a connected tech community doesn’t mean that the everyone always agrees or walks in lock-step with each other. There’s a healthiness in internal critique and desire to find solutions beyond the status quo of the moment. However, I do think it does provide a foundational element for cities and countries trying to grow a more meaningful and vibrant tech community.

The connectedness can come in two ways, digital and analog, and will have a different flavor in each country that mirrors it’s own culture. It helps to have a centralized digital space to throw out questions, opinions and find answers on efficiently. Equally, I think we’re seeing that analog, physical meeting spaces that are represented by the growing number of tech hubs around the continent are another way to accelerate the connectedness needed to grow.

Africa’s tech hubs are the new centralized meeting spaces, the watering holes, for connectivity and connectedness. However, it’s not enough to have a space, without local champions who are willing to make it their mission to grow, connect and bridge the tech ecosystem (gov’t, corporates, startups, academia, investors), then they won’t work.

There’s a Ghana email list of tech guys that I’m on. Opening my email this morning, I was pleasantly surprised to see that a Ghanaian team was pitching last night at TechCrunch Disrupt.

Saya is an app for texting. That mixes SMS, Facebook chat and hyperlocal findability to get in conversations with those near you. They’re on Android, Blackberry and waiting for their iPhone app to be approved.

Robert’s pitch revolves around the 5.8 billion NON-smartphones in the world, and how that market has needs that need to be addressed by apps like their own. Ways to communicate via SMS in a much more elegant way.

Saya isn in a tough position, trying to get US and European-based investors to think that anything to do with old tech like SMS can be big is quite difficult. Their paradigm is set in the West’s way of thinking about being intoxicated the newest tech, not understanding how much of the world more fully uses each technology before discarding it.

Without knowing anything about how many users Saya has, I can say that it looks like an app that will really work in Africa and therefore many other parts of the world. Just looking at the app, it seems that they have a strong focus on product, and are paying attention to things like design details that really do matter.

This last month has kept me too off-kilter to get a good blog post up. However, there have been some very interesting happenings around the continent, here are the ones that caught my attention:

Pivot East

East Africa’s mobile startup pitching competition is just a month away. We announced the top 50 a few weeks ago, and now the 25 Finalists are named as well. Don’t miss this event, June 5 & 6th at the Ole Sereni hotel in Nairobi.

Google Releases “Insights Africa”

This truly deserves a blog post of its own… Google spent a lot of money and time gathering information from over 13,000 people across 6 African countries (Ghana, Kenya, Nigeria, Senegal, South Africa and Uganda) to determine why, and how, people use the internet. This data is all openly available, with an outstanding visualization tool to see what the information really means, and compare it, at InsightsAfrica.com. My chart below is just one example, showing how people access the internet across these 6 countries:

Kariobangi writes a compelling blog post on the difference between the aid that was prioritized for Asia versus that for Africa.

TeleRivet: An Android SMS gateway

Similar what Ushahidi offers at SMSsync, TeleRivet is a tool that allows you to use your Android phone as an SMS gateway. It’s more robust, offers an API, and makes it easy for people to get started on SMS and USSD apps. Mbwana Alliy writes up a blog post on why this is important, and the business prospects involved in utilizing this type of service.

WEF: The Global Information Technology Report 2012

The World Economic Forum’s annual report on IT has some good information on emerging markets. You can read it online here. Here’s the video:

“First, a mobile phone subscriber sends an SMS to a given short code. The message is received in the mobile company’s message centre, which then forwards to ForgetMeNot Africa’s internet servers. The servers process, route and deliver the message to the subscriber, who can then respond.”

Kenya study, impact of venture capital on small and medium sized enterprise

“The minimum profit before use of venture capital was Ksh 34, 866. Upon use of venture capital, the minimum profit increased to Ksh 600, 000. This shows an increase in minimum profit of 94%. The maximum profit respondents reported before use of venture capital was Ksh 38, 567,951 which increased to Ksh 62, 864,152 an increase of 63%. The average profit also increased by 69% (from Ksh 7,204,653 to Ksh 12, 202,775)”

Mpesa, a 5 Year Infographic

Jason Njoku, Funding and Nigerian Movies Online

In Nigeria, Jason Njoku is at it again, raising $8m from Tiger Global Management, a US-based PE and hedge fund. Here’s an interview with him on Forbes. Iroko Partners is the worldâ€™s largest digital distributor of Nigerian movies and African music. The firm is YouTubeâ€™s biggest partner in Africa, boasting over 152 million views in 2011.

This should be a fun one. I was approached a month or so back about the Dragon’s Den coming to Kenya, and it looks like it’s actually going to happen (It’s much like Shark Tank if you’re in the US). If you think you have what it takes to pitch your idea in front of these guys, here’s your chance.

“Dragons’ Den is a series of reality television programmes featuring entrepreneurs pitching their business ideas in order to secure investment finance from a panel of venture capitalists.”

Five experienced investors (the â€˜Dragonsâ€™) are coming to Nairobi in the next few months to hear the pitches of some of Kenyaâ€™s brightest business men and women with the intention of investing in the very best. But these Dragons are not easy to please; they will be looking for entrepreneurs who are offering investable money-making opportunities, who can also explain why their proposal has what it takes to be a success and will make a difference to the local community.

The rules are simple: entrepreneurs ask for a reasonable cash investment in return for a negotiated equity in their business. However, they must get at least the amount they ask for or they will walk away with nothing.

The Dragons are prepared to listen to a pitch for any kind of business but they must be convinced that it requires investment and will make money. Ideas, businesses and products that have previously gained financial backing in the UK Den have demonstrated one or more of the following:

Unique selling point

Scalability

Clear route to market

Planned exit strategy

If you havenâ€™t seen the programme, visit www.bbc.co.uk/dragonsden for more info, or search â€œDragons Den Series 9â€ on YouTube to watch previous entrepreneurs pitching to the Dragons. Email DragonsDenNairobi@bbc.co.uk for an application form.

This isn’t the first time it’s been done in Africa. It ran in Nigeria in 2008. This Dragon’s Den is done by the BBC as a special edition for Comic Relief – a major charity based in the UK.

Everyone wants to compare any up-and-coming tech city in the world to, “The Next Silicon Valley”. That idea is dead on arrival, yet we’re seeing many a reference to it in the media for places like Nairobi and Cape Town.

“What it takes is the right people. If you could get the right ten thousand people to move from Silicon Valley to Buffalo, Buffalo would become Silicon Valley.”

A model for African startups

Yesterday I spoke at Mindspeak, a monthly meeting in Nairobi where people in the business and tech fields talk about what got them to where they are. During the Q&A session after I spoke there was the recurrent question and comparison between what we’re trying to do with the iHub and how we see the increased critical mass in the Nairobi tech space, and if that was going to make us the next Silicon Valley.

That’s the wrong model for us. Instead, we should look closer at the Israeli model.

â€œVery often, local high-tech startups can’t find the funding here,â€ Mr. Glaser said. â€œThey get funding elsewhere and ultimately move their locations from here to be closer to their investors.â€

Israel already has a culture of innovation and entrepreneurship, which leads to a strong startup culture. Due to geographical and political constraints, startups that create high-tech products and services are forced to look at their growth strategy early on. When a company starts gaining traction, they spin out their executive and parts of their operations to places like Silicon Valley, New York, Cambridge, etc, while maintaining parts of their operations in Israel.

We’ve seen the same with a South African tech firm. Yola (old name: Synthasite) moved first their executive team, then part of their operations, to San Francisco. Shortly thereafter, they raised an amazing $20m.

Of course, the Israeli Model, requires more than just up and moving half of your startup to Silicon Valley. That’s a simplified formula. However, it does serve as an indicator for what we should be looking at here. Instead of trying to grow the same ecosystem that took decades to develop in California, we should look at what works for us.

Key ingredients needed:

A network of investors, mentors and connectors in the bigger tech hubs of the world that help incoming African tech companies and help them take the next step. Most of these should be well-placed African diaspora.

A policy and legal framework in African countries that allow them to build and succeed/fail quickly so that they can take that next step globally.

Seed capital and incubation options for early stage prototypes and business testing in-country.

Teach entrepreneurship and leadership within the education system, especially at the university level.

You’ll note that none of these items can be done by just one entity, it takes a concerted effort by multiple parties, including investors, academia and government in order for both a high-tech startup culture to come into being and for success beyond a countries borders to take place.

Certain cities in Africa have the ability to pull this off, including Nairobi, Johannesburg, Cairo, Accra and Lagos. Others have a chance too, but these 5 have the critical mass that makes it more possible, though none of them are there yet.

A conversation on Twitter with Marshall Kirkpatrick of RWW about the top tech blogs to read in Africa made me realize that there is no great list to start from. Most of us just have them in our head, RSS feeds or blogrolls. Some of them don’t update frequently enough, and many of the range across topics, but all of them are useful if you are trying to figure out what is going on in technology around Africa.

Here is a list of African tech blogs that I follow. Hopefully it can be a resource, and a good place for everyone to start from when exploring the mobile, web and general tech space in Africa:

General Web and African Tech

AfriGadget – Stories of low-tech African ingenuity and innovationAfromusing – Juliana’s insights and thoughts on alternative energy in AfricaAppfrica – Pan-African and Ugandan web and mobile tech developmentsBandwidth Blog – Charl Norman’s blog in South AfricaBankelele – One of East Africa’s top business bloggers, also has great insights into the business side of African technologyBuild Africa – Matt’s musings on technology in AfricaCharl van Niekerk – Always insightful post from one of South Africa’s great codersCoda.co.za – One of Africa’s very best web designersDewberry – Shaun’s frenetic blog on general, and South African techMy Hearts in Accra – More of generalist these days, but excellent analysis of African tech space by Ethan ZuckermanHenry Addo – A perspective on tech from Henry in GhanaGeek Rebel – Henk’s blog on entrepreneurship and technologyMatthew Buckland – From one of the pioneers, and big thinkers, in the South African media spaceMike Stopforth – Entrepreneur and South African social media nexus pointNubian Cheetah – Thoughts and news on West African techOluniyi David Ajao – Web coverage from GhanaOpen Source Africa – Just what the name describes… talking about open source development in AfricaPaul in Sierra Leone – hardware tech news from a very hard place to get news/info fromStartup Africa – Tracking mostly South African web startupsStartups Nigeria – Just what the title saysStii – One of my favorite true coder blogs out of South AfricaTimbuktu Chronicles – A must-read covering pan-African technology, from web to mobile to hardwareBits/Bytes – Coding thoughts by the unique and always hilarious “M” from Thinker’s Room.Vincent Maher – Vincent’s excellent, fun and controversial blog on all things South African techWeb Addict(s) – From the mind of Rafiq, opinionated coverage and thoughts on South African tech

African Mobile-focused Blogs

Epic Mobile – mobile phone tips and tricks from South AfricaJopsa.org – (aka Mobiles in Malawi), thoughts by Josh Nesbit in MalawiKiwanja – Ken Banks on mobile usage and his FrontlineSMS app, much of it in AfricaMobile Africa – A great resource for mobile news across AfricaMobility Nigeria – track what’s happening in the Nigerian mobile phone spaceFring – the only tool/app on this list

5 Non-blog Tech Sites and Tools for Africa

Afrigator – the defacto blog tracking tool for African blogsAmatomu – the South African blogosphere trackerMobile Active – Katrin does a good job of finding reports and stories about mobiles in AfricaMuti – mostly South African tech news and gossip, a reddit/digg for interesting African news/blog linksVideoreporter.nl – Ruud’s videos consistently have great tech storiesAkouaba – A French language blog tracker for West Africa

The, “If I missed it”…

I likely missed many blogs that should be on this list. Please add them to the comments below. I know I’ve missed quite a few Francophone and Arabic ones, so PLEASE add those especially.